Business & Investment

Buy-to-let vs stocks: This is where I will invest in 2021

Buy-to-let real estate and equities are two of the UK’s most popular investments. In the long run, both have made a lot of money for investors.

Here, we will look at the outlook with buy-to-let. stock In 2021. I will also talk about where to invest my money next year.

Buy-to-let vs shares: 2021 outlook

In the second half of 2020, the UK experienced a real estate boom with a reduction in stamp duty. This momentum is expected to continue until 2021. But the second half of this year can be more difficult for the UK real estate market. This is because the severance system is scheduled to end in April.

Overall, Light move Knight Frank and Savills expect 1% and 0% respectively, while the national average home price is projected to rise 4% in 2021.

Looking at equities, most market commentators are generally very optimistic about the 2021 outlook. The International Monetary Fund (IMF) expects global economic growth to rise by 5.4% next year as the world recovers from the coronavirus. This should provide a great background for stocks.

Of course, the beauty of the stock market is that there are always great opportunities for stock pickers.Look at the performance of Tesla last year. Most stock indexes struggled, but rose 690%, turning $ 10,000 into nearly $ 80,000. As Jim Cramer of CNBC said: “There is always a bull market somewhere.


In terms of yields, yields vary from place to place, but bytourets continue to offer attractive returns in today’s low interest rate environment. For example, Scotland and northeast have average yields of 7.3% and 6.6%, respectively. Zoopla.. But in London, the average yield is only 3.1%. Overall, the average rental yield in the UK is around 5.2%.

Yields from equities are generally less attractive than in recent years, as many companies cut dividends in 2020. Unilever, Diageo,and Legal & General Still pay attractive dividends. Building a high quality portfolio of UK equities with a yield of 3-5% is not difficult.

Tax reduction

Buy-to-let is less attractive than before from a tax standpoint. It is no longer possible to reduce your tax obligations by deducting mortgage costs from your rental income.

In contrast, equity investors have the opportunity to take advantage of many attractive tax incentives.For example, invest £ 20,000 Stocks and stocks ISA It will be completely tax exempt in 2021. All profits and income are protected from tax collectors. Alternatively, investors can save on their own investment personal annuity (SIPP) and receive tax deductions.

Effort and cost

Finally, let’s talk about hassle and cost. Buy-to-let is very annoying. Owners need to worry about finding the right tenant, maintaining the property, government regulations (such as energy efficiency assessments), and selling the property can be time consuming. Transaction costs are also high. Legal costs are high and buy-tourette owners face higher stamp duty.

In contrast, stocks are much less hassle. You can open an account in minutes, and once you have invested, you can sit and relax. The cost is also very low these days.

I’m picking stocks by buy-touret in 2021

Comparing everything, stocks are where I will invest in 2021. Stocks are much less hassle and cost effective than buying, and the economic environment should provide a great background for the stock market. In addition, there is always the possibility of discovering the next Tesla. Amazon..

Edward Sheldon owns shares in Rightmove, Unilever, Diageo, Regal & General Group, and Amazon. John Mackey, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s Board of Directors. Motley Fool UK owns and recommends shares in Amazon and Tesla. Motley Fool UK recommends Diageo, Rightmove, and Unilever, and recommends the following options: The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.

Buy-to-let vs stocks: This is where I will invest in 2021 Buy-to-let vs stocks: This is where I will invest in 2021

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